Dubai Aluminium (Dubal) has chosen three banks to arrange a $1.8 billion seven-year loan to help fund general operations, its first such facility in a number of years, three banking sources told Reuters on Wednesday.

The firm has chosen Citigroup, Emirates NBD and Societe Generale to arrange the loan, the sources said, speaking on condition of anonymity because the information is not public.

The three banks have fully underwritten the loan, and a process for inviting other banks to join the facility has begun, said one of the sources, a Gulf-based banker.

Dubal's office was closed on Wednesday for a public holiday, and an official at its parent company did not immediately respond to an email query.

Many Dubai companies have come to the loan market in recent months to take advantage of low borrowing rates as the emirate's economy has been growing again and cash-rich local banks have been competing for deals.

Some companies have raised new cash and others have refinanced existing debt they secured when borrowing rates were higher.

Dubai Festival City (DFC), a unit of conglomerate Al Futtaim Group, and Tecom Investments, part of Dubai Holding, are also both currently in talks with banks to raise loans worth around Dh4 billion ($1.1 billion) each.

Dubal has not raised a loan for general business purposes in years, although it has taken on debt for specific projects, according to bankers.

While the pricing has not yet been disclosed, it is expected to be very cheap, said a second banking source, based in Dubai.

Dubal merged last year with Abu Dhabi's Emirates Aluminium (Emal) to create Emirates Global Aluminium (Ega), the world's fifth-largest aluminium company with an enterprise value of about $15 billion.

Prior to the tie-up, Dubal was owned equally by Emal and Investment Corporation of Dubai (ICD), the sovereign fund that holds stakes in some of the emirate's top companies.

Dubal is still an entity within EGA, which is owned by Abu Dhabi state fund Mubadala and ICD, so it can borrow money in its own right.-Reuters